British pound fell against the greenback during the Tuesday Asian session. The dampened market sentiment may be the reason behind the fall.

First death linked to the omicron variant in the UK is the catalysts which dampened the market mood amid its fast global spread. As a response to increasing COVID-19 cases in the country, Borish Johnson, PM, raised the COVID alert to four.

Meanwhile, Health Secretary Sajid Javid told MPs Omicron now represented 20% of cases in England. Mr Javid said the UK Health Security Agency (UKHSA) estimated the current number of daily infections was around 200,000.

He also added that “Omicron has risen to more than 44% of cases in London and is expected to become the dominant variant in the city in the next 48 hours.”

Elsewhere, BBC medical editor Fergus Walsh argues that with Omicron doubling every two to three days, it could go from a small to a huge number very quickly. Data also suggests Omicron is more transmissible than previous variants, with cases doubling in the UK every two to three days.

While omicron keeps GBP/USD at bay, Traders are now keen to watch the Central banks meeting to find any clues. The Fed’s two-day meeting that begins later Tuesday headlines a string of central banks announcing policy decisions this week, including the European Central Bank and Bank of England on Thursday.

The Fed is expected to announce it will wrap up its bond buying stimulus sooner than previously communicated, potentially setting up earlier interest rate increases next year.

On the other hand, The Bank of England does not intend to change its stance on banks paying dividends to shareholders because of the risks posed by Omicron variant of the coronavirus, a top official at the central bank said on Monday.

Deputy Governor Sam Woods told reporters that banks would probably have to hold back on dividend payments in some of the worst-case scenarios spelled out in its annual health check of the banking sector.”But for the moment, it’s BAU (business as usual) on dividends,” he said.

GBP/USD 4 Hours Chart:

Support: 1.3191 (S1), 1.3168 (S2), 1.3129 (S3).

Resistance: 1.3253 (R1), 1.3292 (R2), 1.3315 (R3).

Omicron variant keeps British pound under pressure and the market participants now head towards the Fed and BoE meeting to further direct their move.  In the meantime, we expect a bearish trend for GBP/USD.